Oklahoma Governor Kevin Stitt is asking President Trump to declare the coronavirus pandemic an "act of God" in order to secure aid for the oil and gas industry. Crude oil prices dipped as low as -$40 earlier this month.
Stitt wrote to Mr. Trump in a letter he posted on Twitter over the weekend.
"Oklahoma, like many other states, is living the hardships caused by the COVID-19 pandemic including the near total disappearance of demand for oil and gas products as well as the imminent lack of available storage," he wrote. "We have seen evidence of this demand destruction, gross oversupply, and lack of available storage in the recent market collapse — causing oil futures to close negative for the first time in recorded history. ... We are asking your administration to declare the COVID-19 pandemic a "Force Majeure" or "Act of God" for the narrow purpose of protecting these producers from actions to cancel leases held by production as a result of production stoppage."
Stitt said in the letter that "many operators desire to voluntarily reduce or cease producing on a temporary basis, without fear of parties taking advantage of an opportunity to cancel leases as a result of the curtailment of production."
A sudden drop in travel due to the coronavirus could cut demand for oil by more than 50%.
"Act of God" is a legal term that means an event of uncontrollable, natural forces, and it's frequently used in insurance claims.
U.S. oil production has reached record highs. But as Americans travel less and the demand for oil plummets, oil futures, too, have dropped to historic lows.
Mr. Trump said last week that he's told his Energy and Treasury secretaries to come up with a plan to provide financial relief for U.S. oil and gas developers.